DISPUTE RESOLUTION in the OIL & GAS INDUSTRY :NON-MEDIATION ADR

a presentation by

HEW R. DUNDASChartered Arbitrator DipICArb

CEDR-Accredited Mediatorwww.dundasarbitrator.com

OVERVIEW of PRESENTATION

Introduction Dispute Resolution Options International Disputes Oil & Gas Industry A Case Study Conclusions

DISPUTE RESOLUTION OPTIONS

Litigation Arbitration - Domestic/International Expert Determination Mediation Other ADR Advantages and Disadvantages

INTERNATIONAL DISPUTES

Difficulties of Litigating International Commercial Arbitration Substantive & Procedural Laws Institutions and Tribunals Finality Enforceability New York Convention 1958

FORMS OF ADR

Mediation/Conciliation Executive Negotiation Early Neutral Evaluation (ENE) Private Mini-Trials Med-Arb and Arb-Med Adjudication and DRBs Other/None of the Above

CURRENT ISSUES

Oil Industry Preference for Litigation Selection of Arbitral Tribunals Failure to Grasp ADR Options Fully Ignorance of non-Mediation ADR Expert Determination Excessive Lawyer Involvement Macho Management/Lawyers

CASE STUDY: CATS DISPUTE CATS - North Sea Gas Pipeline Capacity Reservation by 3rd Party User Send Or Pay Obligation; £45m paid Fall In Gas Price – Contract Uneconomic High Court/CoA/House of Lords

Did the Subsea valve work ?

Was CATS “Available “ ?

£100m at stake; £8-12 million legal costs

CONCLUSIONS

Oily Myth 1: There is Certainty in a Judgement Oily Myth 2: Need Judge for High Value Disputes Widen The Options Practical Decisions for Practical Disputes Judges are NOT Engineers etc